Next reports positive annual results

Overall sales increased by 7.2 percent at Next for the year ending January 2015. However, while Next brand sales in the first half were exceptionally strong, up 11 percent, the second half was relatively disappointing and up just 5 percent. Growth in underlying profit before tax of 782 million pounds (1,160.4 million dollars) was up 12.5 percent and underlying EPS grew by 14.7 percent.

The year to January 2015, underlying EPS grew by 15 percent to 420p and the company proposes to increase our total full year ordinary dividend by 16 percent to 150p. This is the sixth consecutive year that our EPS and ordinary dividend have grown by 15 percent or more. Sales for Next Directory, the company’s online and catalogue business, increased by 12 percent and Next Retail by 5 percent. Total group sales rose 7 percent and reached 4 billion pounds (5.9 billion dollars) for the first time.

While Next Retail continues to invest in new stores, Next Directory continues to increase its active customer base as it now delivers to 71 countries and has a growing business in the sale of third party branded products through the Label.

“The continued success of Next is built on the hard work and dedication of our management team. 2015 will bring new challenges and opportunities. Our strategy will remain the same, focused on our products, our profitability and returning cash to our shareholders,” said John Barton, Chairman of Next.

The company expects international online sales to grow by 25 percent in the year ahead. This rate of growth is significantly lower than last year partly because the company has now opened in all the target territories and two of its largest markets, Russia and Ukraine, which have suffered significant currency devaluations. Last year, the company added 34 new major brands to Label and plans to add at least another 30 premium brands.

Lipsy performed well, and profit increased to 5.1 million pounds (7.5 million dollars). The company anticipates that Lipsy profit for the year ahead will be broadly in line with last year.